The Transformers and Rectifiers stock rallied 20 per cent on Monday, following a huge order win. Earlier in the day, the company announced that it had won a third-party export order amounting to Rs 440 crore. This more than doubles the existing outstanding order book of around Rs 350-400 crore. The order is expected to be executed in the next 12 months. While more details are awaited, this order could likely be the first under the new technology licence agreement signed with Fuji Electric Company of Japan. In December 2014, the company entered into this agreement for the design, manufacture and sale of 420 KV and 765 KV reactors and 420 KV generator transformers. In January this year, the company indicated that the first tender after the signing of the agreement was coming up soon.

 

The market for higher range transformers and reactors is growing. The company had entered into a similar technology agreement for 765 KV transformers with ZTR, a Ukrainian company, in 2010. Back home, Transformers and Rectifiers expects Power Grid Corporation alone to buy a chunk of 765 KV reactors and 400 KV reactors in the next five years. 

Hence, there will be more traction in this space once the domestic market looks up. But the company is a much smaller player than its peers such as ABB, Alstom T&D and Crompton Greaves. Besides, Chinese competition is also intense in the transformer market.

 

The order also comes at a time when the company is not on a strong wicket due to the domestic slowdown. For the nine months ended December 2014, the company made losses of Rs 7.27 crore. Against the guidance of about Rs 700 crore for this year, the company has recorded revenue of only about Rs 378 crore up to December 2014. ​

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